Target 11 investigates not-for-profit agency funded by hotel tax

PITTSBURGH — County executive Rich Fitzgerald makes $90,000.

Mayor Luke Ravenstahl pulls in $105,000.

Gov. Tom Corbett earns $174,000.

All of those salaries pale in comparison to the man in charge of promoting Pittsburgh and Allegheny County. VisitPittsburgh's Joe McGrath's salary last year was $353,680. Add in benefits and it comes to a total compensation package of $390,563.

And it doesn't stop at the top. Even at a time of massive government cuts and teacher layoffs, the five highest paid employees under McGrath at VisitPittsburgh each pulled down six figure salaries during the past four years. On top of that, the employees received hefty performance bonuses. Last year, the top five employees received bonuses ranging from $16,000 to $68,000.

So who pays for all of this? Anyone who stays in a hotel in Allegheny County. VisitPittsburgh receives a percentage of the hotel tax. Last year, that amounted to almost $9 million. Target 11 discovered that about half of the organizations budget goes to salaries.

Target 11 Investigator Rick Earle showed the salary data to Allegheny County Councilman Matt Drozd (R) District 1 and state Sen. Jim Ferlo (D) Pittsburgh.

"It's not justifiable. I'd ask who approved all these funds? And the acceleration you showed me within a two year period. I never got that kind of increase," said Drozd, who makes $9,000 a year as a council member.

"There's little accountability, little oversight. They are spending millions of dollars on high salaries, and they receive close to $10 million in public tax money. This money is being squandered by a clique group of staff who have run amuck," said Ferlo, who is calling on the county controller to audit the organization.

Target 11 asked VisitPittsburgh's vice president of Communications about Ferlo's comments.

"We don't know what to say to Senator Ferlo. He really hasn't asked us, and some of his information is misinformation," George said.

Target 11 also requested salary data for every employee, but George refused to release the data. She said they are only obligated to file IRS 990 documents which detail the salary information for the top executives.

George did tell Target 11 that every employee is eligible for a performance bonus at the end of the year.

Target 11 also asked to talk to McGrath, but George said he wouldn't be talking to Target 11 about his salary. McGrath has been at the helm of VisitPittsburgh for 22 years, and just last spring he stepped down as president and CEO, but the board created a new position for him as the executive chairman. George would not release his salary, but said that it is comparable to last year's salary.

George said that all of the salaries are set by the board of directors based upon recommendations from an independent consultant hired to analyze salaries. She said they are in line with other convention and visitor bureaus similar in size.

But according to IRS documents obtained by Target 11, McGrath actually made more in 2010 than the tourism director's in Orlando, New York city and Las Vegas, all bureaus' with much larger budgets.

But Target 11 did find some directors who made more than McGrath, among them directors in Philadelphia and Chicago.

George defended the salaries and said it's money well spent. She highlighted some of VisitPittsburgh's recent accomplishments, including the highest hotel occupancy rate in 20 years and the $4.8 billion dollars spent by tourists in Pittsburgh every year. George said that actually translates into a tax cut for residents.

"That amounts to saving taxpayers in Pittsburgh and Allegheny County $527.00 per household," George told Earle

Still critics of VisitPittsburgh contend that many other factors like winning sports teams actually do more to attract visitors every year.
And some critics, like Ferlo claim that VisitPittsburgh hasn't done enough to lure major conventions to Pittsburgh. VisitPittsburgh contends that the convention center needs an attached hotel to lure more of the larger conventions.

"A lot of productivity is puffery. I really think there's a question about their ineffectiveness in bringing major conventions to the city for Pittsburgh," said Ferlo, who also suggested that Fitzgerald take a hard look at the agency budget.